A Corporation uses the weighted-average method in its process costing system. Th

Question

A Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 750 units. The costs and percentage completion of these units in beginning inventory were:

A total of 10,200 units were started and 9,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 80% complete with respect to materials and 70% complete with respect to conversion costs.

The cost per equivalent unit for materials for the month in the first processing department is closest to:

$21.40

$22.36

$23.09

$23.39

A Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 750 units. The costs and percentage completion of these units in beginning inventory were:

Explanation / Answer

All Amounts in $ Equivalent Units of Production Particulars From Units Closing Total Opening Processed WIP Units WIP Materials 450 9600 1080 11130 Conversion Costs 150 9600 945 10695 Closing WIP Units = 750 + 10,200 - 9,600 = 1,350 units Costs incurred during the month Op. WIP During the month Total Materials 7,800 238800 2,46,600 Cost per equivalent unit of material 22.15633 This cost being closest to $ 22.36, hence this is considered to be the correct solution.

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